Pegasus Airlines: strong 2Q2013 earnings growth for the ‘low-cost network carrier’

In 2Q2013, Pegasus Airlines' core operations grew revenues by 30% and more than tripled the operating profit, continuing the strong earnings momentum developed in 1Q2013. Traffic grew strongly, load factor rose, RASK increased, CASK fell and cash increased sharply after a successful IPO in Apr-2013, since when its share price has gained 46%.

The only blot on the landscape was that ex fuel CASK increased a little in 2Q2013 as labour costs grew steeply, but the 1H2013 performance of both items was more favourable and so this may simply be a temporary issue.

Pegasus' mission statement says: "We aim to combine the network benefits of full-service carriers, and the price benefits of LCCs, to provide inexpensive travel, on-time performance and new planes." It does not mention profits, but, if it can continue to fulfil these aims, it seems that profit growth will also continue.